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The Deepwater Horizon oil rig burns on April 21, 2010 after an explosion in the Gulf of Mexico. (AP file photo/Gerald Herbert)

NEW ORLEANS (AP) — A federal judge has ruled that people pursuing their Gulf of Mexico oil spill claims against BP outside of federal court do not have to pay fees to hundreds of lawyers working on behalf of about 120,000 claimants fighting the oil giant in court.

U.S. District Judge Carl Barbier issued the ruling Wednesday to clarify a previous ruling that left everyone still seeking damage payments from BP having pay 6 percent of their claims to lawyers suing BP and other companies involved in the nation’s largest offshore oil spill. Now, people attempting to settle out of court won’t have to pay the trial lawyers.

Also, Barbier approved this week an agreement between plaintiffs’ attorneys and the states of Louisiana and Alabama to set aside 4 percent of damage payments to pay for attorneys’ fees. The states are seeking damages for lost tax revenues, overtime and other costs to their treasuries that resulted from the spill.

Louisiana’s attorney general, James “Buddy” Caldwell, had contested the fee structure but reversed course after reaching an agreement with plaintiffs’ attorneys that excludes payments for environmental damages to be subjected to the 4 percent fee for attorneys. Caldwell also dropped an appeal on that issue to the 5th U.S. Circuit Court of Appeals.

Separately, federal lawyers on Thursday asked Barbier to find BP, Anadarko Exploration & Production LP and Transcoean Ltd. all liable for the April 20, 2010, spill before a Feb. 27 trial starts. BP and Anadarko jointly owned the well and Transocean owned the drilling rig that exploded, killing 11 workers.

Lawyers for BP and Anadarko took the position that under federal environmental laws Transocean was liable because oil escaped the blowout preventer and riser, both of which were part of Transocean’s operations. Transocean, though, argued that the well owners should be the only companies held liable for the spill.

The arguments centered on interpretations of federal laws governing oil spills — the Clean Water Act and the Oil Pollution Act. Transocean said the spill started inside the well and far under the surface of the sea, which exempts it from being liable for paying for the spill. BP and Anadarko disagreed and said Transocean was liable.

The Justice Department wants Barbier to find the companies liable before the trial starts and said all three companies should each pay their share of penalties.

Barbier took the matter under advisement and did not say when he might rule. Barbier is overseeing the bulk of the lawsuits filed over the oil spill, which will be handled in three phases. The first phase that starts in February is slated to determine liability.

Each of the companies faces hefty fines. Under the Clean Water Act, fines are based on how much oil was spilled. The government’s estimates of more than 200 million gallons of oil spilled would result in fines between $1,100 per barrel and $4,300 per barrel. The upper limit can be assessed if a company is found to have acted with gross negligence in causing an oil spill.

At a hearing Thursday to update Barbier on progress in the case, lawyers said they had finished 333 depositions and prepared 7,700 exhibits for the upcoming trial.

But the hearing did not touch on the subject of a settlement in the massive case before it reaches trial. BP has said in the past that it would like to see the case settled before then. On Thursday, lawyers for BP declined to discuss whether settlement talks were taking place.

Earlier this week, Alabama Attorney General Luther Strange, who is coordinating litigation on behalf of other states, said settlement talks were taking place between various parties. He said it was possible a settlement could be reached before the start of the trial.

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